The Madhya Pradesh High Court has suspended a notification from the RBI regarding the appointment and dismissal of general managers and full-time directors of urban cooperative banks (UCBs) operating in the states.
On Friday, September 3, a division bench made up of Chief Justice Mohammad Rafiq and Judge VK Shukla suspended the Reserve Bank of India (RBI) circular issued on June 25. The HC has also issued opinions to the RBI, the Central and State Governments on the petition filed by Mahanagar Nagrik Sahkari Bank Maryadit, based in Bhopal, said lawyer for the applicant bank, Ajay Gupta. The court order read: Provide notice to respondents about payment of FPs (processing fees) within seven days, refundable within eight weeks. In the meantime, the execution and effect of the contested ordinance of 25.06.2021 which ((concerning) the applicant will remain suspended, declared the HC. The urban cooperative bank based in Bhopal has challenged the constitutional validity of the RBI notification. Gupta said the RBI ordinance regulated the appointment, reappointment and dismissal of managing directors (DMs) and full-time directors (WTDs) of UCBs. and / or CEOs of UCBs are governed by the statutes of the MP State Cooperative Societies Act, counsel for the petitioner said.The cooperative, as a subject, falls under entry 32 of List II – List of ‘State – of the Seventh Schedule to the Constitution, while the banking sector falls under entry 45 of List I – Union List – of the Seventh Schedule, he said. Therefore, the power to legislate and to regulate UCBs falls exclusively within the domain of the State and no It is outside the purview of the Union, let alone the RBI, Gupta said. is absolute is incompetent and lacks authority, “he said. The court gave the respondents eight weeks to file their responses to the notices issued to them,” Gupta added.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)